Mortgage with DMP

carolynw

We have a DMP in place that would be cleared by a lump sum when I retire and leave us with 20k. We currently live in a house worth 450k with a mortgage of 198k. We would like to downsize to a house costing 350k and reduce our mortgage. We are aged 59 and 64 but I plan to continue working for another 7 years. Income is approx 60k per yr but made up of index linked pensions and salary of £43k. It makes so much sense to downsize but would anyone let us? When I do retire our joint income all index linked will be £31k

ACG

Your treating the DMP like a loan.
I can only think of 1 lender who will consider this with the DMP in place - no high street lenders will as far as im aware.

I would suggest you speak to a broker.

Thrugelmir

Your existing lender will listen to a request to downsize. Clearing the DMP at the same time should form part of your consideration as well.

carolynw

Would we be better to retire then pay off dmp, then try and get a m smaller mortgage? If so how long should we wait after paying off DMP? Thanks for advice

Thrugelmir

I would explore the options fully before making any decisions. The DMP is extremely unhelpful to your cause. Hence my previous comment of addressing everything at the same time. With a structured plan. An underwriter is more likely to consider the matter seriously.

Your options for a mortgage in retirement are constrained by your income, i.e. what would happen if one of you died for example. What the survivor be in a position to fund the mortgage in their own right.

amnblog

As ACG says, the DMP is not a convenient low payment loan. It is a big red warning sign to potential lenders.


If you are serious about downsizing now you need to factor in settling the DMP now.